Snapchat will list on the US stock exchange this year and investors are currently weighing up whether to buy into its IPO.

But how do you evaluate a rapidly-growing tech company and decide whether to invest in its shares?

Holly Black, speaks to a leading UK tech investor, Jeremy Gleeson, manager of the Axa Framlington Global Technology fund, to get his thoughts.

Money-maker? Snapchat will list on the stock exchange later this year

Photo-sharing app Snapchat's £18 billion ($22 billion) US flotation will be the biggest since Facebook’s £60 billion listing in 2012.

Five-year old Snapchat has 158 million users and rising, some 94 million of whom are aged 13 to 24. Those figures look great, so why are experts cautious?

Some are not convinced the app can make money, others are concerned about a slowing in its user numbers.

Some investors have refused to take part in the initial public offering after it emerged that new shareholders will not get voting rights, calling it a ‘major red flag’. Others are simply wary about getting their fingers burnt.

Jeremy Gleeson, manager of the Axa Framlington Global Technology fund, says: ‘Initially two main factors determine how a tech company does when it lists: the level of hype and the price.

'If you get those right, you have a successful IPO. Once the excitement dies down and the results come through, the share price will start to be based on the actual business.’

Two recent examples are Facebook and Twitter. Facebook floated in May 2012 at a meaty $38 a share.

There was a lot of hype and a raft of concerns about whether the firm could actually monetise its business.

Gleeson held off from investing when it listed, cautious about its profitability and how a shift from desktop computers to mobile phones would work.

By the end of August shares had more than halved to just $18. This was the point at which Gleeson invested.

Shares are now $137. It’s the third largest holding in his fund, which has return 56 per cent over the past year.

In contrast, Twitter seemed set to succeed when it listed 18 months later in November 2013.

Gleeson says the firm looked to have learned from Facebook’s mistakes by listing at a more sensible price of $26.

The stock soared, reaching $69 by January. But Twitter was struggling to monetise the business and growth in new users eased off. Today shares are around $16 – a fall of more than 75 per cent from their peak.

Gleeson has never invested but has had success with other technology IPOs, though, such as hand-held video camera firm GoPro.

‘I met the chief executive and I went out the same day and bought a GoPro. We had such fun with it on a family holiday. I loved how simple the video editing was that I bought shares.’

The stock listed at $24 a share in June 2014 and he sold when they reached almost $90 just a few months later in October.

Since then, demand for the stock has tapered off. Shares are now back down to just $9.50.

Gleeson also invested in wearable fitness tracker device Fitbit when it listed on the stock exchange at $20 in June 2015.

Shares peaked around $47 but Gleeson sold the stock when the Apple watch was launched, fearing the competition could be too stiff. Shares are now $5.90.

Now experts have to decide whether Snapchat will soar or stumble.

Already high profile investors including pension fund giant Royal London have said they will not be backing the business. Gleeson, too, will be watching from the sidelines.

While Snapchat users typically engage with the app up to 18 times a day, they typically only use it for 90 seconds at a time, which may not be enough for advertisers.

Snapchat needs to prove it can make money and to price itself sensibly.